http://www.forbes.com/markets/feeds/afx/2007/08/29/afx4066860.html 08.30.07, 12:54 AM ET
SINGAPORE (Thomson Financial) - A rally on Wall Street overnight on renewed hopes for a US interest rate cut sent Asian stock markets higher Thursday, with stronger-than-expected economic data from Malaysia and the Philippines underpinning gains in those markets.
Federal Reserve Chairman Ben Bernanke said in a letter to a lawmaker that Fed policymakers are 'prepared to act as needed' if the market's turbulence hurts the economy, raising hopes for a rate cut at the Fed's Sept 18 meeting.
The major US indexes rose sharply in a vigorous rebound from the prior-day selloff, although light volumes ahead of the US Labor Day holiday next week left some analysts unconvinced.
'It was roughly the reverse mirror image of Tuesday's 280-point Dow-decline,' said Scott Brown, economist at Raymond James. 'Any news? Not really. Sometimes the market does what it does and turns to the economic data as an excuse -- only in this case, there were no significant data reports.'
Asian markets rose across the board with financial stocks, the key decliners in Wednesday's session, leading the advance. The US is a key market for Asian goods and worry that the meltdown in the housing sector could trigger a recession has weighed on regional markets in recent weeks.
The Nikkei 225 was up 1.3 percent and the broader Topix up 1.1 percent at the close of the morning session.
The mining, shipping and steel sectors were all higher in Tokyo, finding further support in a weaker yen. Technology and the big auto exporters were also in the black.
Honda Motor rose 1.4 percent to 3,740, Toyota Motor gained 0.8 percent to 6,580 and Sony was up 2.1 percent at 5,340.
In Sydney, the S&P/ASX 200 rose 1.2 percent, and the All Ordinaries index rose by the same amount.
Index leader BHP Billiton was up 1.8 percent at 37.72 dollars and Rio Tinto rose 0.8 percent to 90.86 dollars, helped by stronger commodity prices.
Betting companies were the main losers due to concerns about revenue losses because of an outbreak of equine influenza that has shut down horse racing in Australia.
The nation's largest betting company, Tabcorp, was down 2.7 percent at 15.00 dollars while the second largest, Tattersall's, fell 5.5 percent at 4.63 dollars. Tattersall's decline came even as it reported better-than-expected June year earnings.
Financial stocks rose with Macquarie Bank up 1.0 percent at 72.20 dollars and deal making investment firm Babcock & Brown up 2.5 percent at 23.46 dollars.
Data boost
The South Korean Kospi added one percent. The Kospi outperformed during Wednesday's rout after data showing factory output grew much more than expected in July.
'It seems Wall Street's influence on the Seoul bourse is weakening a bit after several weeks of unprecedented volatility and this is a good sign,' said Daewoo Securities analyst Lee Kyung-Soo.
'The fundamentals of the local economy and companies are pretty firm and investors are now appreciating that,' Lee said.
More domestic data are on tap with the service sector output due out Thursday and current account balance scheduled for release on Friday.
Posco was up 2.4 percent at 587,000 won. The world's fourth-largest steelmaker confirmed that it's planning a steel processing plant in Japan with Nissan Trading Co, a unit of Japan's Nissan Motor Co.
In the financial sector, Shinhan was down 0.4 percent at 57,400 won. Woori was up 0.5 percent at 21,200 won.
The Philippines Composite rallied 3.2 percent after the government said GDP rose 7.5 percent in the second quarter from the year earlier, topping the average estimate of economists polled by Thomson IFR for a rise of 6.9 percent.
President Gloria Arroyo said the economy should meet full-year growth targets of 6.1-6.7 percent.
Malaysian GDP released Wednesday showed the economy expanded 5.7 percent in the second quarter, above forecasts for a rise of 5.2 to 5.5 percent. The Kuala Lumpur Composite Index rose one percent.
Elsewhere, the Hang Seng rose 2.3 percent. CNOOC Ltd, China's third-largest oil company, rose 32 cents or 3.6 percent to 9.2 dollars. The company said yesterday its first-half to June net profit fell 10.6 percent from a year ago, to 14.6 billion yuan.
The Singapore Straits Times rose 1.1 percent, with DBS up 1.5 percent. DBS shares have been under water for the past several sessions on concerns about its exposure to collateralized debt obligations, some of which may have exposure to US subprime debt.
The Taiwanese Taiex rose 1.8 percent and the Shanghai Composite added a more modest 0.1 percent.
In Jakarta, the benchmark Composite Index was up 1.7 percent.
ciara.linnane@thomson.com
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